In 2020, after the murder of George Floyd and the mass protests that followed, a number of companies pledged change within their own ranks, pledging to create fairer policies. Some companies engage in racial equity audits to initiate internal reforms. These audits, often conducted by outside companies or individuals, examine and assess the company’s actions and how those actions promote or prevent discrimination in their workplace.
Some of the most prominent companies to authorize these reviews, also known as civil rights audits, include Starbucks, Facebook and Airbnb. Starbucks has hired former Attorney General Eric Holder to conduct a racial equity audit following an incident in which a Philadelphia store manager called police on two black men after a barista told them that only buying customers could use the bathroom.
McDonald’s is next in line for a closer look. At a general meeting on May 26, the group proceeded to a non-binding vote ask the burger giant to conduct an independent racial equity audit. The vote, which obtained the support of 55% of voting shareholders, comes after the trials which were filed by many black franchise owners and operators complaining of being relegated to low-turnover locations. Another group of litigants allege that a Wisconsin franchise manager would not hire black candidates.
One of the most persistent voices calling for an audit has been the SOC Investment Group, an advisory body that oversees the Strategic Organization Center pension funds., a coalition of four unions, the Service Employees International Union, International Brotherhood of Teamsters, Communications Workers of America and United Farmworkers of America. Together they own 2.5 million shares of McDonald’s. The group pushed McDonald’s to retrieve a severance package the former CEO of McDonald’s received after he was fired for sexual harassment last year.
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SOC Investment Group chief executive Dieter Waizenegger said that while McDonald’s says it is committed to diversity, equity and inclusion and has promised to disclose information about how it meets its commitments to these values, this has not yet taken place. What led shareholders to file their proposal, Waizenegger says, was “frustration that it takes a long time for the company to come before shareholders on these topics.”
Waizenegger is under no illusions that auditing is the solution to workers’ challenges. He says the audits are a way for the company to move beyond posting social justice slogans on social media and to actually think about civil rights implications in the workplace.
Unfortunately, there is little reason to believe that the audit will be conducted in good faith. Marcia Chatelain, professor of history and African American studies at Georgetown University, says McDonald’s current diversity, equity and inclusion goals are sparsely substantiated: the Chicago-based company did philanthropic donations to organizations like the NAACP and the National Urban League, but it consistently fails to implement real structural change for rank-and-file workers. She adds that
McDonald’s has limited its pay raise promises to company-owned stores, which affect a small segment of its workers. Company-owned stores accounted for only 7 percent of all McDonald’s stores in operation in 2020.
“Traditionally, McDonald’s has dictated many aspects of how franchisees run their restaurants,” Chatelain explains. “But when it comes to justice issues, in terms of worker issues, paid vacations, and sexual harassment investigations, they say it’s up to individual franchise owners to deal with those issues.”
Châtelain, author of Franchise: The Golden Arches in Black Americaa history of fast food companies’ relationships with local communities, indicates that as long as McDonald’s leaves it up to individual franchise owners to manage workers without the support and resources of the McDonald’s corporation, the public only receives anecdotes about good franchise owners, rather than a chain-wide system that protects and fairly compensates workers.
Davis says companies prefer to investigate something harder to pin down: workplace culture.
There is a larger question, however, about the effectiveness of these checks. Jerry Davis, a professor of business administration and sociology at the University of Michigan, argues that a common problem with many audits is that companies need to collect demographic information about their employees, but don’t publish it publicly. which is precisely what auditors need to look at to determine whether or not a company promotes women or employees from marginalized backgrounds. This demographic information is required for annual reporting to the Equal Employment Opportunity Commission. If companies chose to disclose this information, their employees would start asking questions.
“Employees working there would look at this stuff and say, ‘Wait a minute, how come all the managers are white and yet most of the employees are women or people of color,'” says Davis.
Instead of focusing on those easier-to-collect, but more damning numbers, Davis says companies prefer to investigate something harder to pin down: workplace culture. Managers want workers to ask questions about their day-to-day experiences: Do they encounter microaggressions, racist posts in workplace group chats, or instances of workplace harassment? These questions are more difficult to study in a systematic way for large companies, especially for a franchise business.
When asked to comment on the audit and which third-party group they were hiring to conduct it, a McDonald’s spokesperson noted in a statement to Perspective““Diversity, equity and inclusion are at the heart of McDonald’s core values. We are committed to providing fair opportunities to our employees, franchisees and suppliers. While we are proud of our progress, our efforts continue and we will continue to focus on actions that have a meaningful impact. Consistent with these efforts, we have engaged a third party to conduct an assessment.
Harvard sociology professor Frank Dobbin criticizes the practice of outsourcing audits to outside firms. Outsourcing the review, he says, can mean that no official or designated company official will commit to changing company policy once the audit is complete.
Dobbin, whose work has focused on company-run diversity programs, says companies typically focus on diversity and harassment training in their audits. He says these training sessions “rarely move the needle.” What companies need to change is how they hire and promote people. “Generally they change the things that don’t matter,” Dobbin says. “Because it’s easier, because there’s less repression.”
If this is McDonald’s strategy, it’s hardly an outlier in corporate America. It’s not uncommon for companies to make a public statement committing the company to any popular cause, but quietly drop that commitment once the issue disappears from public view. Dobbin thinks companies should focus on recruiting students from historically black colleges and universities or Latino-serving institutions if they want to attract more managers of color to the workplace.
Georgetown’s Chatelain notes that the only way for McDonald’s to truly commit to racial justice would start with the core concerns of its rank-and-file restaurant workers, who are disproportionately likely to be black and brown women. The company must take wages, benefits and worker safety seriously. “Commit to a living wage, benefits for all employees, paid sick leave and tuition reimbursement, and ensure that their colleagues in the fast food industry do the same,” Chatelain said.
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